Thai cement company to invest in US$386m plant in Myanmar

Business Desk

The Nation

Publication Date : 27-08-2013

Siam Cement Group on Monday said it would invest 12.4 billion baht (US$386 million) for its first integrated greenfield cement plant in Myanmar to serve the rising demand in that market.

Kan Trakulhoon, president and chief executive of SCG, said the board of directors approved the investment to construct its first fully integrated cement plant in Myanmar under that country's Foreign Investment Law.

Construction is expected to begin by mid-2016. The cement plant, with annual output capacity of 1.8 million tonnes, will be strategically located in Mawlamyine, where there is a long-term supply of limestone complemented by access by boat to Yangon, Myanmar's primary commercial hub.

The plant will include a 40-megawatt power plant with the latest clean technology for internal power consumption, supporting port facilities, and other infrastructure for future expansion.

"SCG has solidified its position as one of Myanmar's market leaders in terms of dependable product attributes, brand exposure, supply-chain efficiency, and depth of distribution channels," Kan said. "The Myanmar cement market was estimated at approximately 4 million tonnes in fiscal year 2012, and is forecast to grow annually at 10 per cent over the next five years."

In fiscal 2012, SCG exported about 1.7 million tonnes of cement to Myanmar.

Kan said this project was a major investment to support growth of the cement-building-materials business in Myanmar and elsewhere in Asean after recent announcements that it would construct cement plants in Indonesia and Cambodia. It is in accordance with the company's strategy to become a sustainable business leader in Asean.

With a majority stake in the Myanmar plant, SCG says it places importance on sustainable development. That includes the 40MW power plant, a 9MW waste-heat generator system for reduced electrical usage, supporting port facilities, and other basic infrastructure.

SCG's stock price yesterday closed at Bt410, down by 0.97 per cent from last Friday.

Bualuang Securities yesterday noted in research that the cement, petrochemicals and building-material businesses would strengthen SCG's growth in the next few years.

The growth of its cement business will be driven by rising sales revenue backed by new investment and the increasing demand in Myanmar, Cambodia and Indonesia.

Bualuang said the two new cement plants in Indonesia and Cambodia would be able to operate commercially in 2015 and the one in Myanmar in 2016.

For its building-materials business, SCG will focus more on mergers and acquisitions.